Enphase Energy Q3 Earnings: Buying Soaring NasdaqGM:ENPH Stock Before Call?

in EARNINGS/INVESTING IDEAS by

Enphase Energy, Inc. (NasdaqGM:ENPH) is scheduled to report Q3 earnings results on October 27, 2020.

The company is expected to report earnings of $0.24/share on revenue of $169.3 million. The consensus earnings per share (EPS) of $0.24/share is based on a poll of 14 analysts and represents a decline in eps of −21.0% over the same quarter last year, when the company reported earnings of $0.30/share.

The revenue forecast of $169.3 million based on a poll of 14 analysts implies a year-over-year (YoY) decline in revenue of −6.0%. Last year the company reported $180.1 million in revenue for the quarter.

Expected to report EPS contraction of −21.0% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $169.28 $180.06 −6.0%
EPS $0.24 $0.30 −21.0%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, missed 1 quarters, and met expectations 1 quarters.

What are your expectations from Enphase Energy, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.14 $0.17 22.5% Beat
Q1, 2020 $0.32 $0.38 18.2% Beat
Q4, 2019 $0.33 $0.39 17.8% Beat
Q3, 2019 $0.25 $0.30 19.0% Beat
Q2, 2019 $0.13 $0.18 40.9% Beat
Q1, 2019 $0.05 $0.08 68.4% Beat
Q4, 2018 $0.06 $0.04 −31.0% Missed
Q3, 2018 $0.04 $0.04 0% Met

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 22.5%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 4, 2020 $61.21 $74.99 22.5% Increase
May 5, 2020 $43.98 $52.68 19.8% Increase
February 18, 2020 $41.09 $57.22 39.3% Increase
October 29, 2019 $25.44 $18.76 −26.3% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.27, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.27 implies a 1.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

Enphase Energy, Inc. is currently trading at $116.14/share, up 1.3% for the day. The company is trading at approximately 98.4% of its 52-week high of $118.05/share. The company’s stock price is up 54.9% since the last earnings report and up 6.6% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 80.22 suggests the company is trading in technically overbought territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGM:ENPH Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 86.39 and a forward P/E multiple of 88.97.

Enphase Energy, Inc.’s current share price also implies a price-to-book (P/B) multiple of 39.53. The following table summarizes some other key fundamental ratios:

Data as of October 21, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $116.14
P/E Ratio 86.4x
P/E Ratio (Fwd) 89.0x
PEG Ratio 0.1
Total Debt / Total Capital 2.5%
Levered Free Cash Flow $152.5 million
EV / EBITDA 97.6x

Finbox

Enphase Energy, Inc. is a large-cap stock with a market capitalization of $14.634 billion and a total enterprise value of $14.396 billion. The company operates in the Information Technology sector and the Semiconductors & Semiconductor Equipment industry.

Enphase Energy, Inc., together with its subsidiaries, designs, develops, manufactures, and sells home energy solutions for the solar photovoltaic industry in the United States and internationally. The company offers semiconductor-based microinverter, which converts energy at the individual solar module level, and combines with its proprietary networking and software technologies to provide energy monitoring and control services. It also offers AC battery storage systems; Envoy communications gateway; and Enlighten cloud-based monitoring service, as well as other accessories. The company sells its solutions to solar distributors; and directly to large installers, original equipment manufacturers, strategic partners, and homeowners, as well as directly to the homeowners and the do-it-yourself market through its legacy product upgrade program or online store. In addition, it offers online and in-person training resources for solar and storage installers, and Enphase system owners through its Enphase University. Enphase Energy, Inc. was founded in 2006 and is headquartered in Fremont, California.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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